Should you delay replacing company cars because of the new tax rules?

The answer is “it depends”, but based on our sums for the limited number of cars where WLTP CO2 is published – probably not.

There are basically three factors:

1. RDE2 (for diesels) which is mandatory from January 2020 for brand new models and January 2021 for all new registrations.
2. The 2% reduction for cars registered on or after 6 April 2020.
3. The uplift for WLTP (broadly 1% of scale charge for each 5g/km of extra CO2).

With the RDE2 switch saving 4% the total saving could be 6% for 2020/21 which means that CO2 overall needs to rise by less than 30g/km to make a 2020/21 diesel car cheaper than a 2019/20 car (just 2%/10g for a petrol). Early indications are that, overall, taxes will be about the same across the board, but of course this will vary by car.

For a £25k RDE2 compliant diesel, with a WLTP increase of 15g/km, the overall difference is a reduction of 3% (see the graphic) which means tax savings of £25 a month for a 40% taxpayer. So, for arguably a “best case scenario”, the driver only saves £25 a month for one year. Is that enough to justify waiting longer for the car? Only you will know for your fleet.